FHLBNY Implements Risk-Based Capital Plan
Contact: Eric Amig - 212 441-6807 |
December 1, 2005 |
New York, NY -- The Federal Home Loan Bank of New York (“FHLBNY” or “Bank”) opened for business today with its new Capital Plan. Prior to the opening of business, outstanding shares of capital stock owned by the FHLBNY’s community member-lenders were automatically exchanged for shares of the Bank’s new Class B stock.
Through the Gramm-Leach-Bliley Act (“Act”), Congress reaffirmed the critical role the FHLBanks play in the U.S. financial system and, at the same time, modernized their capital structure. The legislation created new risk-based capital requirements and set minimum capital ratio requirements, including a minimum capital-to-asset ratio of 4.0 percent. With the implementation of the new Capital Plan, the FHLBNY fulfills the mandate of the Act which did not set a deadline.
"The Bank has implemented a new Capital Plan meeting the goals of maintaining the Bank’s co-operative, conservative business model and of providing simplicity and continuity," said Alfred A. DelliBovi, President and CEO of the Bank. "The new capital structure more closely aligns member stock ownership with business activity. As a result, today we are better positioned for enhanced efficiency, plus our ability to provide value to our member lenders and the communities we serve is strengthened.”
The Bank's new capital structure has one class of stock: class B stock, with a par value of $100, which can be redeemed on five years' notice, subject to certain conditions. Class B stock has two subclasses, one for membership stock purchase requirements and the other for activity-based stock purchase requirements. Each member’s new minimum stock requirement was determined by adding the new membership and activity-based stock requirements established under the Plan.
An Information Statement regarding the Capital Plan was mailed to all stockholders on October 4, 2005, and was filed with the Securities and Exchange Commission on the same date. The Information Statement, which includes a copy of the Capital Plan, is also available on the FHLBNY’s website.
The FHLBNY also held an informational Capital Exchange “Webinar” on October 26. A replay of the entire Webinar is available at https://fhlbnyevents.webex.com. The Webinar will be available for replay until March 29, 2006.
The FHLBNY is an $82 billion, congressionally chartered, wholesale bank. It is part of the FHLBank System, a national wholesale banking network of 12 regional, stockholder-owned banks. The FHLBNY serves 302 community lenders in New Jersey, New York, Puerto Rico, and the U.S. Virgin Islands. The mission of the FHLBNY is to advance housing opportunity and local community development by maximizing the capacity of community-based member-lenders to serve their markets.
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